With the roll out of Next Generation Access (NGA) products based on high speed fibre networks already underway in Fibre to the Cabinet and Fibre to the Premise variants, Comms Dealer has conducted an extensive overview on the implications of NGA for resellers and end users.

Next Generation Access will provide a step change in the availability of fibre-based services in the future. This will have both positive and negative impacts on the business models of resellers, and it's important to understand the dynamics of these changes in order to be successful, according to Rob Leenderts, Sector Development Manager, Partner Services at Cable&Wireless Worldwide.

"Put simply, more accessible fibre means a lower cost base, delivering more bandwidth for less money. This will enable cost savings over traditional WAN technologies such as IP VPNs and newer ones such as Ethernet. As a result, comms resellers will be able to afford to go after larger scale opportunities with more margin potential without coming up against the entry barrier of high cost fibre installation," he stated.

The higher bandwidth capabilities of NGA will enable enterprise style applications such as videoconferencing, virtualisation and cloud services to be more readily available to the SME market. However, this is not without attendant challenges and risks. "Resellers with an existing customer base of high value, high margin WANs risk having these services eroded by low cost, high bandwidth NGA services, even though the SLAs may not be comparable," Leenderts said. "We saw this in the Frame Relay and ATM markets a number of years ago when ADSL first emerged. Comms resellers will have to shift their strategies and business models towards more focused and sophisticated propositions."

Growing demand
The increase in bandwidth will drive a demand for more applications, and the end user will experience the types of speeds normally associated with much more costly business services, at a cost point comparable to current broadband services. "End users with bandwidth hungry businesses will have much more freedom to locate where they want to and develop their businesses at any pace," noted Leenderts. "These are not just lifestyle choices. For instance, new media start-ups might remain near to universities or creative arts centres rather than being forced to relocate to cities where high bandwidth services are typically available. Architects, engineers and many others can consider automating business models and processes and become truly location-independent when large complex files or records can be communicated much more readily than in a pre-NGA world. This opens up endless new prospects for resellers."

Andrew Saunders, Head of Product Management and Marketing at Zen Internet, believes that FTTC (Fibre to the Cabinet), with download speeds from 15 to 40 Mbps and upload speed options of two and 10 Mbps, will play a key role in accelerating the adoption of Next Generation Access. "There's a need to manage expectations. Even with 4 million premises past by the end of 2010, sizable chunks of the UK will not have access to FTTC services for some time. But the impact could well be revolutionary," he claims.

Technology on trial
Zen's first FTTC trials began in July 2009 and ran until the end of January this year. "The trial allowed us to learn more about fibre technology, the installation process, how customers use it and the challenges supporting this new technology," said Saunders. "The trial was then extended to our own employees and a limited number of customers that connect to the new cabinets in exchange enabled areas. We are continuing to connect new customers through an extended commercial trial until the full launch in September."

There's a gap in the middle of the business Internet access market that affects smaller enterprises, between leased line, Ethernet services, and everyday ADSL. DSL is cheap to set-up and affordable to run. Leased line and Ethernet services are fast, reliable and scalable, with service levels guaranteed. But neither option fully works for many SMEs. ADSL is variable while leased line and Ethernet services can be prohibitively expensive for smaller firms. "Now we have a chance to fill the gap," said Saunders. "For a small premium over regular ADSL businesses will get faster, dependable upstream and downstream connections that come close to advertised speeds. You have a world where business customers feel like they're getting real value. This is going to impact UK businesses in an exciting, positive way."

The broadband industry should welcome this, but the fact is that the gap suits some providers, Saunders claims: "Some have a lot of their business in SDSL, bonded line or low cost 2MB leased line connections. If FTTC takes off - and it will - these products risk becoming obsolete. We in the broadband industry have a choice. Either we can regard FTTC as a threat or we can look on it as a massive opportunity. By talking honestly to businesses and providing services that fill the gap, we have an improved chance of building them, and us, a better future."

Clarity of vision
With all this opportunity, however, Darren Farnden, Head of Marketing at Entanet, warns that resellers need to be clear about what they're trying to achieve before investing time and resource into expanding their product portfolio. "With so many connectivity options being trialled and launched - LLU, 21CN, FTTC, FTTP, Annex M, Ethernet - it's even more important that resellers decide their own growth strategy, the groups of customers they want to win business from and where they can get the services from to meet their requirements," he commented. "A wholesale provider like ourselves can help resellers target their market effectively because we have the national resilient network and the product breadth."

Entanet's strategy has been to adopt the technology at a level that enables it to not only create connectivity packages for resellers, but also offer a wholesale proposition that allows relatively small resellers to create their own niche in the market. "The EWCS (Entanet Wholesale Carrier Services) product enables resellers to take a wholesale service and develop products unique to themselves," he said. "Available in either a managed or unmanaged form, EWCS is a viable alternative."

Fibre availability underpins the wider range of connectivity options that resellers can promote to their customers. Its adoption by network operators like Entanet is enabling the channel to greatly expand their offering. This can be faster broadband that still contains the 'last mile' copper element but delivers a better service than all-copper products; all-fibre connectivity to the premises that can allow for massively increased speed and reliability; or Ethernet-based fibre services that serve exclusive connectivity needs backed by stringent SLAs. "Resellers need to understand the capabilities of each, what advantage they bring to the customer and then help them determine the most suitable for their immediate and future requirements," added Farnden.

murphx has been a trialist for BT's FTTC product and is also one of a small number of ISPs selected to trial BT's FTTP (Fibre to the Premise) services. "Connectivity is the lifeblood of most businesses, said Carl Churchill, Commercial Director at murphx (which was acquired by Daisy in June). "Fibre-based services offer the opportunity for businesses to purchase connectivity that delivers upon their current and aspirational requirements, and to embrace convergence and new technology that can drive business efficiencies and reduce operational overheads."

It is a big transition from being a traditional voice and data reseller into a solutions business, and a challenge that will take time for many to overcome, however the rewards are considerable. "We have set up a technical pre-sales team to work with our partners to identify opportunities 'beyond the connection' which has resulted in some exceptional opportunities and sizeable deals," commented Churchill.

Connection-plus
"The threat in a fibre-based world is that the channel doesn't see past the connection. It's about delivering value over and above traditional voice and Internet access to the end user, and encompassing a series of cost and efficiency saving services to distinguish yourself in the market. As a wholesale aggregator our obligation is to build the services for our resellers to upsell to their end users. Our investment in state-of-the-art hosting facilities and new product innovation is representative of our commitment to bring new services to the channel."

Alternatives to fibre such as EFM (Ethernet First Mile) roll out are also on the increase. EFM allows operators to deliver connectivity by using multiple copper pairs to deliver a higher bandwidth solution. The installation timescales in comparison to fibre-based Ethernet services are usually considerably shorter although it is not as quick as FTTC-based broadband connectivity. "For higher bandwidth connectivity EFM is a strong proposition, however we must not overlook the fact that the connectivity continues to be based on copper," said Churchill. "While this is likely to change in the future, the repair times for these solutions can be 20 clock hours. While 20 clock hours is similar to that of FTTC until BT's new care products are released, fibre-based Ethernet services in most instances are available with just a four hour fix."

Bonding should not be discounted as an alternative to fibre-based connectivity, notes Churchill. "Many organisations are choosing to replace their higher cost leased line services with bonded broadband connectivity and the popularity continues to increase," he observed. "Even with the reduction in cost on fibre-based Ethernet connectivity and competitive FTTC broadband services, bonded broadband is usually available at a lower cost in comparison."

According to Mark Logan, General Manager, Next Generation Access Products at Openreach, over time fibre will set the bar for price performance which all other solutions will be measured against. "That's why Openreach is investing Å0Ñ52.5 billion in this new infrastructure," said Logan. "This is a long-term project and represents a new fibre-based access network for the UK."

Openreach will be offering a fibre-based local loop with multi-service capabilities (GEA-FTTP) that promote innovation. "This is a long-term project. The market has evolved significantly in recent years and we expect this to continue with new innovation and new entrants, so we need to offer a flexible product," added Logan. "However, our customers will all have different business models, so access to duct and provision of a sub-loop unbundled product means Openreach's customers have a choice and could build something quite different to GEA if they so chose."

Openreach has announced a roll-out to 66 per cent of the UK with a mixed economy network of FTTC and FTTP. Over 1.5 million homes and businesses can access these services today. "Openreach is providing an 'open' and equivalent service which is available to all our communications providers," said Logan. "Resellers can choose to take advantage of our network via our wholesale customers or alternatively can invest in direct local exchange connections."

Quality counts
The success of next generation fibre will be based upon the quality and variety of services that are delivered over it, and Demon, with its services running over Cable & Wireless Worldwide's UK network designed for businesses, has the infrastructure to deliver, says Matt Cantwell, Head of Demon. "We are in the favourable position of having capacity to handle the greater demands that will come from the growing fibre market," he stated. "Our business network could handle much higher capacity than it currently does, so as soon the demand is there we will be ready to deliver the services. We are looking to build a fibre product into the Demon broadband portfolio as soon as it becomes more widely available. Currently we are trialling an up to 40Mb fibre based service in Muswell Hill, London."

The next generation of fibre-based broadband services will provide a range of opportunities, the most well known being that fast connections mean more done in less time. But there are some big challenges too. "In the first instance there'll be market cannibalisation," added Cantwell. "At the moment the only choice for a business that wants a high speed business connection is to opt for a Dedicated Internet Access product costing several thousands of pounds per year. To offer low cost 40Mb fibre-based broadband will create a shift in the market, and although this means greater demand there'll be the risk of losing a significant amount of revenue.

Big challenge
"The second challenge is quality of service. The lower cost fibre services may have higher topline speeds compared to ADSL 2+ broadband, but these speeds will not be dedicated or guaranteed in the same way as current business grade Ethernet or leased line services are, and some resellers will not be able to provide the same support SLAs. Pitching the right products to the right customers will be key a challenge for all telcos as well as resellers."

Griffin has always provided a broad range of connectivity from business grade broadband to bonded broadband, SDSL, EFM and Ethernet services. Fibre fits right into that portfolio alongside the business grade broadband and bonded broadband, arguably displacing SDSL, according to Adrian Sunderland, Group CTO, Griffin. "One interesting application that is gaining traction from early adopters is the concept of a hosted desktop, with the desktop operating system and/or the software applications being streamed to the end-user's desktop," he said. "This provides the end user with a per month rental cost for a fully managed IT solution. This type of service really benefits from having more bandwidth."

Many resellers will be cautious about the complexity of new technologies, but they need to take chances if they want to move forwards, urges Paul Cloudsdale, Technical Director, O-bit Telecom. "NGNs are the foundations on which future services will be built and are necessary to provide the networks needed to support growing demands for bandwidth intensive, data-rich services," he said. "The sheer capability and superiority of NGNs will enable network operators to provide a higher Quality of Service for applications that are revolutionising business. More and more people are using high bandwidth applications that demand a level of quality currently not available on legacy connectivity. Customers are starting to find their business data is becoming more and more critical."

Reliability
Fibre offers faster, more reliable connectivity which in turn is the enabler for a better end user experience when taking feature rich services. "There's only so much you can achieve with copper or wireless technologies, these services tend to have poor SLAs and SLGs. Fibre-based products enjoy richer support which means you can build mission critical services without the worry," said Cloudsdale.

O-bit has key relationships with the major upstream carriers delivering fibre-based solutions and networks. "As with anything, the industry-wide acceptance of NGNs is reliant on the larger carriers realising the commercial potential of this technology," noted Cloudsdale. "Once they see the good return on investment that NGNs can generate, then more of them will move towards investing in it. With more consumers and businesses using VoIP, IPTV and videoconferencing, the industry is faced with little options other than to get ready for NGNs."